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Ethereum has been in a consolidation state for a while now ranging between the 3400 dollars -3600 dollars area. Within the same period, there has been a lot of action in the cryptocurrency market. These actions I believe are key towards Ethereum getting to the $5,000 price tag for the first time.
There is no doubt that the next Ethereum bull run will see it hit this price tag. Some of the activities that will contribute to this include;
- Bitcoin and Altcoin price Resurgence
- The “London Hard Fork” update
- NFT market growth
Bitcoin and Altcoin price Resurgence
Bitcoin has been on a huge price rally in the last few days that has seen it break the key barrier of $55,000. Traditionally, there has always been a correlation between the price of both Bitcoin and Ethereum. A rise in the price of Bitcoin causes the price of Ethereum to rise.
As the number one and two cryptocurrencies respectively, investors are always trying to mimic their paths. Based on this, there are expectations that soon the price of Ethereum will rise as well. If this happens, it could result in Ethereum getting to an all-time high of $5,000 from the current existing high of $4,200.
The “London Hard Fork” update
This is the update done on the Ethereum network recently. The update aims to change some of the functionalities that drive Ethereum. A key example is changing from the Proof of Work model to the Proof of Stake model.
This will assist in eliminating the mining process of Ethereum. Traditionally, new Ethereum coins are created through mining. However, there has been opposition towards mining recently due to the huge energy requirements.
Changing to the Proof of Stake model will give Ethereum more credibility in the face of investors. A move that is expected to attract more investments. In return, an increase in investors will cause its price to rise due to the rise in demand.
This update is also aiming at limiting the number of Ether coins in circulation. Coin burns reduce supply helping boost the price. Although the update is yet to take effect fully, it is going to achieve this status soon and this could trigger a huge price rally.
Data from Ethburned indicates that more than $1 billion Ethereum coins have been burnt since the implementation of the update.
NFT Market Growth
The Non-Fungible Tokens are experiencing huge market growth as more people see the value in it. The exchange in this market currently amounts to hundreds of millions per month.
As the biggest network driving the NFT market, It is well-positioned to benefit from its rise. Most of the transactions in the NFT market have to happen through ETHER. This is the standard Ethereum coin.
The opportunities in the NFT market are immense. The ability to exchange digital assets is revolutionary and will keep expanding.
This expansion will directly help in driving Ethereum’s price towards the $5,000 mark and beyond.
Future of Ethereum’s price
As the second-biggest cryptocurrency in the market by valuation, Ethereum has huge potential and a majority of investors believe the current price is an undervaluation.
The combination of these factors makes it almost obvious that the price is set for a huge rally with the right trigger. I believe most investors are waiting for It to break out of the ranging zone before putting in their money.